From Barron's Tech trader Daily:
What is one to make of the cut in fiscal Q3 forecast this morning by LED maker Cree (CREE)?
Well, there are several ways to view the situation, and unfortunately, a random sampling of three different perspectives this afternoon yields none that recommend the stock:
Hans Mosesmann, Raymond James: Reiterates an Underperform rating on shares of Cree. It’s a structural problem: this is a commodity, and supply and demand is hurting prices. “Two-thirds of the top-line miss is attributed to weaker LED component sales as it has taken longer on the distribution side to work through customer inventories post the Chinese New Year than previously anticipated. The remaining third of the top-line miss is attributed to weak LED chips sales, driven by weak demand and aggressive pricing.”
Joshua Paradise, Morgan Stanley: Reiterates an Equal Weight rating on Cree shares. It’s just that Cree is slipping, he thinks: “LED lighting is strong and accelerating, but Cree is losing market share as more competitors are able to produce LEDs with adequate quality for use in lighting applications. Several competitors are being very aggressive on price to take market share from Cree.”...MORE